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The rising star of the entrepreneur

Starting a business can be rewarding, but does come with its challenges

Entrepreneurship initiates productivity and creates jobs.

By Kristin KentSpecial to the Star

Thu., Oct. 3, 2013

When Arjun Kumar finished university, he struggled to find a job he was passionate about.

Having studied human biology and physiology, business was the furthest thing from his mind.

“I wanted to be a doctor. My dad is a physician, and I always thought medicine was the only route for me, and that's how it had to go,” says Kumar, from Whitby.

As he worked in health care — doing cardiovascular and ultrasound patient testing — he started to see inefficiencies.

“Technology is what I love to do as a hobby. So I created a solution to make my life easier as a health-care professional,” he says. “I soon realized this could benefit all health-care professionals.”

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He created a product called the emergency protection card, which has an embedded electric cardiogram to help cardiac patients deliver information to doctors quickly, in case they land in the emergency room.

“The first summer I started creating this product, I ended up generating $35,000 in just three months,” he says. “That's when it clicked; this is just one clinic.”

And so began Kumar's journey as an entrepreneur. He was just 24 years old. Now, four years later, his company, Kela Medical, also in Whitby, employs 12 full-time staff.

“It all happened by accident but it was the opening I needed,” he says. “Business has shown me a world of opportunities and I feel that I've grown so much as an individual.”

Kumar says entrepreneurship is something special, despite 70-hour work weeks, sleepless nights and zero social life.

“Now I preach it to everybody — if you try to become an entrepreneur, even for a few years, the things you'll learn in that short time is more than you'll learn anywhere else in the world. You figure out very quickly if you're made to be an entrepreneur. You give up everything to go one step further.”

Entrepreneurship is exploding in popularity. Self-made men and women are becoming the rock stars of our generation. So much so that more and more of us are thinking about launching our own businesses.

Statistics Canada says 2.7 million Canadians are self-employed.

About 15 per cent of Canadian-born and 20 per cent of immigrants are self-employed. Of those, 950,000 are women. Between 2001 and 2011, the number of self-employed women grew 23 per cent, compared to 14 per cent for men.

Entrepreneurship is a key determinant of economic growth; it initiates productivity and creates jobs.

As of December 2012, small businesses — defined as companies with less than 100 employees — accounted for 98 per cent of businesses in Canada, employing 70 per cent of the country's private labour force.

Industry Canada points to three reasons for the rise in entrepreneurial status.

One: the relationship between employers and employees has changed. It used to be people anticipated staying with one company for the length of their careers. Economic downturns followed by downsizing make this impossible. Individuals want security. Entrepreneurship is one way some are seeking control of their own paycheques.

Two: individuals want an independent lifestyle. They don't want to be tied down for someone else's work. They want to pursue their passions and want autonomy in work hours and working conditions.

Three: entrepreneurs have become celebrities in their communities and in the media. This, coupled with pessimism about public figures, has helped set their place as our role models.

Victoria Lennox, co-founder of Startup Canada, attributes another reason for the rise.

“There is a disconnect between what jobs are available and what our grads are looking for,” she says. “Millennials have different expectations. In terms of technology, constantly being connected, feeling the impact of their work immediately, sometimes traditional career opportunities don't give them what they are looking for.”

Entrepreneurship as a viable career move has permeated our educational institutions as well.

New programs in high school, universities and community centres are popping up to encourage entrepreneurship as a skillset and a mindset. Small business incubators, student venture fundsand venture capital pitch days are now commonplace at universities.

The Government of Canada is also encouraging entrepreneurship, as it's economies with strong entrepreneurial cultures that tend to flourish. It wants immigrants to start their business here and is offering permanent residence through a new start-up visa, the first of its kind in the world. But entrepreneurship is challenging. Not everyone is made to be his or her own boss.

The Business Development Bank of Canada (BDC), a crown-owned financial institution that caters to the growth of entrepreneurs, says successful business owners may share key motivators, such as a need for achievement, a need to influence and a need for autonomy.

Desire alone doesn't make a business successful.

Untested technology, consumer spending, fluctuations in the marketplace, international treaties and access to funding can pose major problems for entrepreneurs.

Put lightly — it's risky business. More than 51 per cent of companies never see their fifth birthdays.

Lennox says this shouldn't discourage would-be entrepreneurs.

“We need to get over this culture of being risk-averse and being afraid to fail. It's OK to fail; it's a learning opportunity,” she says.

“Just think what comes through that experience and how much stronger and more resilient those entrepreneurs are. And how they will never make those same mistakes again.”

Bring your dreams to market

Before starting a business, Canada Business Network suggests creating a killer business plan.

Here's how:

Start with an executive summary: This section outlines key points within your business plan. It's an overview and needn't be more than two pages. It should describe your business in basic but appealing language. This may be the most important section of your plan, as investors and lenders land on this page first.

Zone in on strategy: Although business strategies will differ from one company to the next, the components required in this section are the same. You will need a brief introduction describing products or services, your company's legal structure and main objectives. Next, you'll delve into your company's current state and discuss the industry it's in. Note any competitive advantages. Discuss your growth plan. Investors want to know where you intend to take the business in 3-5 years.

Know your market: Flush out the “4 Ps” of marketing: product, price, place and promotion. It may be prudent to profile your ideal customer. Are they retailers, wholesalers or consumers? Which demographic do they belong? This isn't guesswork, back up your facts with market research.

Plan your operations: In this section, outline all of your operational needs. The list may include supplier requirements, facility needs, stocking needs, quality control demands and information technology requirements.

Think about damage control: A lender can appreciate that businesses have their ups and their downs. The entrepreneur must prove he or she is ready for both scenarios. Paint an accurate picture of your strengths, weaknesses, opportunities, and potential threats. Be honest, overstating strengths can damage your credibility.

Manage your team: A great business has a first-rate team behind it. How will you manage employees? Discuss short- and long-term plans, including recruitment, training and retention. Further, outline each role in your company.

List your social approach: How does your company work for the community? Do you hold high ethical standards? List these standout achievements to give you a competitive edge.

Know your e-strategy: How will your customers find you and how will your reach out to them? Outline your e-commerce, website development, and hardware/software requirements. E-business may save you money.

Be sure to outline the cost-savings accordingly.

Put your plan into numbers: Now that you've described your business in full, the next step is defining and projecting your financial needs. Forecast the next five years, but give most detail for the upcoming year.

Assume costs and revenues, forecast profits and loss and include cash flow statements.

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